Because of convergence, broadcasters must develop new revenue model, probably based on their talent as content providers, FCC Mass Media Bureau Chief Roy Stewart said at Media Institute lunch Thurs. He said convergence “may finally become a reality,” but “the new business rules have yet to be written.” Stewart was asked about problems convergence would cause for regulators, but he mentioned only potential restructuring of FCC.
Notable CROSS rulings
Possible ascent of Sen. Hollings (D-S.C.) to chairmanship of Senate Commerce Committee would be “big challenge” for incumbent carriers, who view him as knowledgeable on telecom issues but “one of the stronger opponents” of Bell companies, USTA spokesman said Wed. Congressional sources said Sen. Jeffords (R-Vt.) has delayed until today (May 24) announcement on whether he will leave Republican party to become Democratic-aligned Independent, move that would tip current 50-50 balance in Senate, giving Democrats control of leadership posts. Hollings, ranking Democrat, almost certainly would assume committee leadership from Sen. McCain (R- Ariz.) if Jeffords left Republican party, but Hollings aide said it wasn’t known when or whether leadership transition would occur. Supporters of telecom deregulation and opponents of campaign finance reform and other issues affecting broadcasters expect rougher times.
Media lobbyists were active on Capitol Hill last week as members of Network Affiliated Stations Alliance (NASA) made rounds of congressional leaders seeking support in their fight with Big 4 TV networks to retain 35% TV station ownership cap. One of NASA’s main goals is seeking bipartisan letter from several lawmakers (and perhaps legislation on issue) to FCC Chmn. Powell telling Commission not to “disturb” -- as one lobbyist put it -- cap or increase it to 50% or higher, as sought by networks. Broadcasters were calling on many of same members of Congress also lobbied last week by cable industry in opposition to DTV must-carry (CD May 17 p3). Networks, meanwhile, continued to press for relaxed ownership limits.
Senate Commerce Committee grilled FCC Chmn. Powell Thurs. about everything from agency’s administration of E-rate program to his views on broadcast ownership concentration and structural separation for Bells. Questioning took place at confirmation hearing for Powell and 3 other nominees to Commission, although most of time was spent with Powell as senators used session to delve into variety of FCC issues. Powell is undergoing confirmation for his recent 5-year nomination as chairman. Those nominated for new FCC posts are Kathleen Abernathy, former Bell company executive; Michael Copps, ex-asst. secy. of Commerce for trade development; and Kevin Martin, ex-aide to FCC Comr. Harold Furchtgott-Roth. Committee leaders said they tentatively planned to vote on confirmations May 24.
Legislation that would increase FCC enforcement authority might be tweaked to reflect concerns that proposed changes might not be sufficient to deter potential violators of telecom law, House Telecom Subcommittee Chmn. Upton (R-Mich.) said Thurs. at hearing on HR-1765. “We need to give [FCC] Chmn. Powell and his colleagues more ammo so that they can enforce the law,” he said. Upton bill would increase fines FCC could levy on violators to $1 million per violation, with $10 million cap, from current $120,000 limit. It also would extend statute of limitations on enforcement action to 2 years from one. Upton said he would assess recommendations of panelists testifying at hearing, who offered variety of suggestions on how to improve effectiveness of bill.
Publisher Mortimer Zuckerman is interested in buying N.Y. Post, he confirmed in ex parte filing in FCC proceeding on whether to waive newspaper-broadcast cross-ownership rules for News Corp. He provided no additional details, but News Corp., in its own filing, said it hadn’t said there were no other potential buyers, only that “it is very unlikely that it could obtain a fair price for the Post.” It also said Zuckerman’s interest was “highly conditional,” and public wouldn’t benefit if newspaper competition in N.Y. were eliminated.
Cal. PUC told Pacific Bell it not only must satisfy federal Telecom Act for long distance market entry but also must prove separately that it satisfies intrastate long distance market entry requirements of Cal. law. PUC Comr. Geoffrey Brown gave telco until June 4 to file evidence that it had complied with state long distance entry law. He made ruling in response to motion by group of Cal. CLECs in PUC’s current Sec. 271 proceeding on whether to support Pac Bell entry before FCC. Brown agreed with CLECs’ argument that showings required under state utility code’s Sec. 709.2 for intrastate long distance entry by an incumbent telco or its affiliates were similar enough to Telecom Act’s 14-point checklist that a state Sec. 709.2 “assessment” proceeding for Pac Bell also could serve as basis for PUC’s federal Sec. 271 recommendation. Pac Bell unsuccessfully argued that Sec. 271 case record also could serve to determine compliance with state law, which requires proof for instance that incumbent telco isn’t behaving in anticompetitive way and isn’t cross-subsidizing long distance business from local revenues. Brown ruled that “mere assertions” by Pac Bell that evidence from Telecom Act proceeding could serve in a related but separate state case weren’t enough basis for PUC action.
Even though majority of FCC commissioners appeared willing to open rulemaking on eliminating broadcast-newspaper cross-ownership rules, FCC was forced to withdraw item from Thurs. agenda because majority couldn’t agree on text of rulemaking, we're told. FCC spokesman would say only that item wasn’t ready for final action. Action almost certainly means broadcast-newspaper cross-ownership rulemaking won’t be started until after new commissioners take office, officials inside and outside agency said.
As expected, FCC at agenda meeting May 10 will consider reforming universal service system for rural carriers. Commission will vote on whether to accept plan proposed by Rural Task Force (CD May 3 p7). It also will consider 2 other items: (1) Notice of Proposed Rulemaking to determine whether rule barring cross- ownership of newspapers and TV should be eliminated or modified. FCC Comr. Furchtgott-Roth told reporters at media breakfast Thurs. that he had “great skepticism about the value of cross-ownership rules, particularly those not statutorily based, and newspaper cross-ownership is not statutorily based.” (2) Proposal to remove “unnecessary regulatory barriers to the introduction of new wireless devices using spread spectrum and other digital technologies.” As part of that item, FCC will review staff’s denial of application for equipment certification filed by Wi-LAN.
Opponents of Bell company data relief bill put on show of solidarity and attacked measure’s merits at Tues. news conference, but they were very quiet on what tactics they could use to defeat it, except procedural objections, with time running out before Thurs.’s House Telecom Subcommittee markup (CD April 24 p2). USTA, on other hand, made very clear that its rhetoric would ignore criticism of bills and focus on critics, which it said were fronts for AT&T’s attempt to protect cable Internet business. House Commerce Committee Chmn. Tauzin (R-La.) and ranking Democrat Dingell (Mich.) were poised to reintroduce last year’s HR-2420 just after our deadline, when House reconvened.